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Friday, July 11, 2014

New Tool from Atlanta Fed: GDPNow

by Calculated Risk on 7/11/2014 08:57:00 AM

The Atlanta Fed has introduced a nowcast of GDP called GDPNow. The model mimics the BEA's methods to estimate GDP and is updated five to six times a month as data is released. The model tends to converge to the BEA estimate just before the BEA advance estimate for GDP is released each quarter.

Here is a discussion of the model: Introducing the Atlanta Fed's GDPNow Forecasting Model

We will update the nowcast five to six times each month following the releases of certain key economic indicators listed in the frequently asked questions. Look for the next GDPNow update on July 15, with the release of the retail trade and business inventory reports.

If you want to dig deeper, the GDPNow page includes downloadable charts and tables as well as numerical details including the model's nowcasts for GDP, its subcomponents, and how the subcomponent nowcasts are built up from both the underlying source data and the model parameters. This working paper supplies the model's technical documentation. We hope economy watchers find GDPNow to be a useful addition to their information sets.
Here is the current Q2 nowcast:
The GDPNow model forecast for real GDP growth (SAAR) in 2014: Q2 was 2.6 percent on July 10, unchanged from its July 3 value.
Ouch. Not much of a rebound from Q1.

Note: The first estimate of Q2 GDP will be released on July 30th and will include the annual revision (maybe Q1 will be revised up).